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Home My WebLink About2005-07 MINUTES OF STEERING COMMITTEE MEETING Wednesday, July 20, 2005 A meeting of the Steering Committee of the Orange County Sanitation District was held on Wednesday, July 20,2005 at 5 p.m., in the Districts Administrative Office. (1) The roll was called and a quorum declared present, as follows: STEERING COMMITTEE MEMBERS: STAFF PRESENT: Directors Present Blake Anderson, General Manager Steve Anderson, Chair Nick Arhontes, Director of Regional Assets and Carolyn Cavecche, Chair, OMTS Committee Services Roy Moore, Chairman, FAHR Committee Bob Ghirelli, Director of Technical Services Tod Ridgeway, Chairman, PDC Committee David Ludwin, Director of Engineering Carol Beekman, Director of Public Affairs Directors Absent: Lisa Tomko, Director of Human Resources Jim Ferryman,Vice Chair Mike White, Acting Director of Finance Jim Silva, County Supervisor Gail Garrett, Committee Secretary Jennifer Cabral, Senior Public Information OTHERS PRESENT: Specialist Bradley R. Hogin, General Counsel Sonja Wassgren-Morgan, Principal Public Director Phil Luebben Information Specialist Director Jill Hardy Juanita Skillman, Records Management Don Hughes Specialist Sherry Harlon, Moreland &Associates Jim Burmr, Engineering Supervisor Terri Sforza, OC Register Layne Baroldi, Legal & Regulatory Affairs Liaison (2) APPOINTMENT OF CHAIR PRO TEM FILED IN THE OFFICE OF THE SECRETARY No appointment was necessary. ORANGE 00-"u �-.,,*ennnt DISTRICT AUG 24 2005 (3) PUBLIC COMMENTS RY - There were no comments by any member of the public. (4) RECEIVE, FILE AND APPROVE MINUTES OF PREVIOUS MEETING The minutes of the June 22, 2005 Steering Committee meeting were approved as drafted. (5) REPORT OF THE COMMITTEE CHAIR Chair Steve Anderson announced that he has appointed Director Jill Hardy to the Urban Runoff Ad Hoc committee. Minutes of the Steering Committee Page 2 July 20, 2005 He will present CASA a resolution in recognition of their 5&Anniversary at their annual conference In San Diego in August. Chair Anderson, Director Mike Duvall, and Dr. Robert Ghirelli met with the SAWPA negotiating team on July 19, 2005. SAWPA is no longer considering a parallel bring-only line. Dr. Ghlrelli informed that a long term coordinated strategy to manage the SARI line is needed and a joint OCSD/SAWPA study of the line is being considered from both a short-term 3-5 year perspective to a longer-tens 30-50 year vision. The Irvine Company is proposing to connect 2,500 new homes to the SARI line. Director Duvall discussed the Mountain Park project and long term future of a"brine only"delivery for discharge to the SARI line. Dave Ludwin clarified that connection to the SARI line is conditional and there will be no guarantee of right to discharge should the line become a "brine only" line in the future. Lastly, SAWPA will investigate issues with Stringfellow as they continue to assist OCSD and SARI. The Cooperative Projects Grants Committee met on June 28, 2005. Nick Arhontes reported one action item: approval of contract extensions with the cities of Buena Park, La Habra, Seal Beach, and the sanitary districts of Midway City and Garden Grove. Due to the heavy rainfall, this year's data analysis will not be completed until the fall. A capacity plan document will be submitted to the regional board when the analysis Is complete. The Committee will meet quarterly to review project requests and consider next steps for the program. Chair Anderson will be In Washington, DC next week to meet with Representative Gary Miller and Orange County congressional delegation staff to discuss continued support for EPA assistance for secondary treatment upgrades. Chair Anderson reminded that the PDC Committee will meet on August 41°. OMITS and FAHR will be dark in August. The Urban Runoff Ad Hoc committee will meet on August 3, 2005 at 3 p.m. (6) REPORT OF THE GENERAL MANAGER Carol Beekman, Director of Public Affairs, provided the legislative progress report. Director Ridgeway has requested District staff prepare an annual legislative agenda which will be in place by October,when annual lobbyist contracts are renewed. General Manager reported that he has accepted Dharma Consulting's request to be released from their contract. The Southern California Alliance of Publicly Owned Treatment Works (SCAP) met last week with Larry McKinney to go over the county's proposal for governance for urban runoff In north, central and south portions of the county. The general managers of the special districts in Orange County discussed their roles and how they tied in with the county. Larry will present the proposal to the City Managers Association. Sanitation District staff has drafted a resolution in support of the County of Orange's efforts to develop and implement a regional water quality strategic plan for Board approval. General Manager announced the second Orange County Infrastructure report card will be rolled out at UCI Beckman's Center in October. Representative Gary Miller will be invited to be the keynote speaker. Minutes of the Steering Committee Page 3 July 20,2005 (7) REPORT OF GENERAL COUNSEL General Counsel Brad Hogin did not make a report. (8) DISCUSSION ITEMS (Items A-D) A. Report on Mountain Park Development: Jim Burror distributed a map showing the Mountain Park Project boundary and development area, and the current and proposed lines. The Irvine Company is proposing to connect 2,500 new homes to the SARI line. He updated committee members on the Mountain Park project status and its interrelationships with the on-going SARI line discussions regarding long-term protection. Several alternatives have been presented by the Irvine Company in conjunction with the Corps of Engineers, varying in construction costs. A direct Gypsum Canyon Road connection Is the least expensive connection location at SARI line for the Mountain Park sewage flows. Members of the Steering Committee expressed concern about long term security of the Mountain Park connection in light of future flows in the Santa Ana River. Since SARI's future alignment is uncertain, OCSD recommends that all project flows conned to the SARI downstream of the Control Gate Structure. The City of Anaheim should own the new sewer line. Jim Burror requested direction to move forward. Director Ridgeway directed staff inform the Irvine Company that proposed and alternate options were reviewed with the Board. If Irvine Company is adamant on an option that may result in future liability to the Sanitation District,staff will return with an action item for Board approval. Directors present concurred with Director Ridgeway's direction. B. The Agenda Items scheduled to be reviewed by the Board's working committees in August were reviewed. OMTS and FAHR will be dark in August. C. The agenda items scheduled to be presented to the Board at tonight's meeting were reviewed. Director Cavecche Informed that she will pull Asset Management item 12(e)from the Consent Calendar. D. Committee members discussed moving the October Standing Committee meeting dates due to conflict with the League of Cities Annual conference. (9) OTHER BUSINESS. COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There was no other business discussed. (10) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING Minutes of the Steering Committee Page 4 July 20, 2005 There were none. (11) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND/OR STAFF REPORT There were none. (12) CONSIDERATION OF UPCOMING MEETINGS The next Steering Committee meeting is scheduled for Wednesday,August 24, 2005 at 5 p.m. The next Board Meeting is scheduled for Wednesday, August 24, 2005 at 7 p.m. (13) CLOSED SESSION The Committee convened at 5:50 p.m. in Closed Session, pursuant to Sections 54956.8, 54956.9, 54956.9(b)and 54957, to discuss six (6) items. Minutes of the Closed Session are on file with the Board Secretary. Confidential Minutes of the Closed Session held by the Steering Committee have been prepared in accordance with Government Code Section 54957.2, and are maintained by the Board Secretary in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. A report of the recommended actions will be publicly reported at the time the approved actions become final. At 6:55 p.m., the Committee reconvened in regular session. (14) ADJOURNMENT The Chair declared the meeting adjourned at 6:55 p.m. Submitted by: '�'k�t- C" -- Gail Garrett Steering Committee Secretary N.�W MCb,mileel0 CMn h 5.0 STATE OF CALIFORNIA ) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, 1 hereby certify that the Notice and the Agenda for the Steering Committee meeting held on Wednesday, July 20th, 2005, was duly posted for public inspection in the main lobby of the District's offices on Thursday, July 14th, 2005. IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of July, 2005. Penny Kyle, S6cretary Phe Board of Directors of Orange County Sanitation District Posted: July 14, 2005, 12:00 p.m. ` . By: ( d" r'r/�'� t a Signature wpdx%gmlty mm�p ting.f ORANGE COUNTY SANITATION DISTRICT BOARD SECRETARY(2) y O191 9 62-2412911 L.: (714)962d356 wwr..etl.mm m.,Iltq Pi Box NOTICE OF MEETING 8127 t2J �inVeOey cA OF THE 92728.8127 STEERING COMMITTEE .u.rt Mount: 1f Ellis Avenue FoontanVa11ay � ORANGE COUNTY SANITATION DISTRICT 92]9BJ618 .Mv.°"ma..' WEDNESDAY, JULY 20, 2005 - 5 P.M. • eml.. Anaheim DISTRICT'S ADMINISTRATIVE OFFICE Brea 10844 ELLIS AVENUE Buena Perk Lypress FOUNTAIN VALLEY, CALIFORNIA 92708 Foumam Orton Fullerton Gorden eel Hunonpton Beach Irnne L. Raor. A regular meeting of the Steering Committee of the Board of Directors of La Palme Las ruam'ms Oran ge County Sanitation District will be held at the above location, date and Newport Beach time. 0.renge Plarentie Santa Ana Seal Beach Stanton Tustin We Park Verse Linda kewity of Dran, .nhary Dl...in. costa Mesa Midway Gay w.c.r DLerl . borne Ranch To maintain world ofass leadership in wastewater end water resource management. STEERING COMMITTEE AND BOARD MEETING DATES FOR THE NEXT TWELVE MONTHS Wednesday, July 20, 2005 Wednesday, August 24, 2005 Wednesday, September 28, 2005 Wednesday, October 26, 2005 `Wednesday, November 16, 2005 'Wednesday, December 21, 2005 Wednesday, January 25, 2006 Wednesday, February 22, 2006 Wednesday, March 22, 2006 Wednesday, April 26. 2006 Wednesday, May 24, 2006 Wednesday, June 28. 2006 'Tentatively rescheduled from regular fourth Wednesday. KweptagendmSleedng Commitlwo4guteedng Dates Fenn2.dw STEERING COMMITTEE (1) Roll Call: Meeting Date: July 20, 2005 Meeting Time: 5:00 p.m. Meeting Adjourned: D.M. Committee Members Steve Anderson, Board Chair............................................. Jim Ferryman, Board Vice Chair......................................... Roy Moore, FAHR Committee Chair................................... Carolyn Cavecche, OMTS Committee Chair.......................— 'Tod Ridgeway, PDC Committee Chair................................— Jim Silva. Supervisor.......................................................... Others Brad Hogin, General Counsel Director Jill Hardy Don Hughes Staff Present Blake P. Anderson, General Manager Nick Arhontes, Director of Regional Assets & Services Carol Beekman, Director of Public Affairs _ Bob Ghirelli, Director of Technical Services Jim Herberg, Director of Operations & Maintenance David Ludwin, Director of Engineering Patrick Miles, Director of Information Technology Mike White,Acting Director of Finance/Treasurer Lisa Tomko, Director of Human Resources Gail Garrett, Committee Secretary c: Lenora Crane HAdephagenda\Steering Committee\200WM72005 Roll Call Sheet Form NEW.3.dm AGENDA REGULAR MEETING OF THE STEERING COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, JULY 20, 2005 AT 5 P.M. ADMINISTRATIVE OFFICE 10844 Ellis Avenue Fountain Valley, California Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2, this agenda has been posted in the main lobby of the District's Administrative offices not less than 72 hours prior to the meeting date and time above. All written materials relating to each agenda item are available for public inspection in the office of the Board Secretary. Items Not Posted: In the event any matter not listed on this agenda is proposed to be submitted to the Committee for discussion and/or action, it will be done in compliance with Section 54954.2(b) as an emergency item or because there is a need to take immediate action,which need came to the attention of the Committee subsequent to the posting of agenda,or as set forth on a supplemental agenda posted in the manner as above, not less than 72 hours prior to the meeting date. Accommodations for the Disabled: The Board of Directors Meeting Room is wheelchair accessible. If you require any special disability related accommodations,please contact the Orange County Sanitation District Board Secretary's office at(714)593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Items Continued: Items may be continued from this meeting without further notice to a Committee meeting held within five(5)days of this meeting per Government Code Section 54954.2(b)(3). Meeting Adjournment: This meeting may be adjourned to a later time and items of business from this agenda may be considered at the later meeting by Order of Adjournment and Notice in accordance with Government Code Section 54955 (posted within 24 hours). (1) ROLL CALL (2) APPOINTMENT OF CHAIR PRO TEM. IF NECESSARY (3) PUBLIC COMMENTS All persons wishing to address the Steering Committee on specific agenda items or matters of -2- July 20, 2005 Agenda general Interest should do so at this time. As determined by the Chairman, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to three minutes. Matters of interest addressed by a member of the public and not listed on this agenda cannot have action taken by the Committee except as authorized by Section 54954.2(b). (4) APPROVE MINUTES OF PREVIOUS MEETING Approve draft minutes of the June 22, 2005 Steering Committee meeting. (5) REPORT OF COMMITTEE CHAIR (6) REPORT OF GENERAL MANAGER A. Status of a Legislative Progress Report to the Board - Beekman B. Dharma Consulting (7) REPORT OF GENERAL COUNSEL (8) DISCUSSION ITEMS (Items A-D) A. Report on Mountain Park Development (Information item only) B. Review Agenda Items scheduled to be presented to Committees in August (Information item only) C. Review and consideration of Agenda Items for Board of Directors Meeting of July 20, 2005 D. Discuss Moving the October Committee Meeting Dates Because of League of Cities Annual Conference (9) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS IF ANY (10) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING (11) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT (12) FUTURE MEETING DATES -3- July 20, 2005 Agenda The next Steering Committee Meeting is scheduled for 5 p.m., Wednesday, August 24, 2005. The next Board Meeting is scheduled for 7 p.m., Wednesday,August 24, 2005. (13) CLOSED SESSION During the course of conducting the business set forth on this agenda as a regular meeting of the Steering Committee, the Chair may convene the Committee in closed session to consider matters of pending real estate negotiations, pending or potential litigation, or personnel matters, pursuant to Govemment Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a) purchase and sale of real properly, (b)matters of pending or potential litigation; (c)employment actions or negotiations with employee representatives; or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Directors during a permitted closed session and are not available for public inspection. At such time as final actions are taken by the Board on any of these subjects,the minutes will reflect all required disclosures of information. A. Convene in closed session, if necessary 1. Confer with Real Property Negotiator, Govemment Code Section 54956.8 Property: 5445 Dodds Avenue, Buena Park. District Negotiator. Bradley R. Hogin, General Counsel Negotiating Party: Stage Road, LLC Under Negotiation:To instruct for price, terms, and conditions for the purchase, sale, exchange, or lease of subject property. 2. Confer with Real Property Negotiator, Govemment Code Section 54956.8 Property 7465 Lampson Ave., Garden Grove (APN 131-662-01). District Negotiator: Terry B. Knapper, CB Richard Ellis Negotiating Party. Rob Guthrie, Guthrie Development; Frank Adler and Jeff Hirsch, Lee &Associates. Under Negotiation: To instruct for price,terms, and conditions for the purchase, sale, exchange, or lease of subject property. 3. Confer with General Counsel re existing litigation, Orange County Sanitation District, at al. v. County of Kern, et al., Tulare County Superior Court Case No. 189564. Govemment Code Section 54956.9. 4. Confer with General Counsel re existing litigation, Orange County Sanitation District v. County of Kings, Kings County Superior Court Case No. 03C0835. Govemment Code Section 54956.9. 5. Consider Public Employee Discipline-One (1)item, Govemment Code 54957. 4- July 20, 2005 Agenda 6. Confer with General Counsel re Anticipated Litigation pursuant to Government Code Section 54956.9(b): One (1) potential case. B. Reconvene in regular session C. Consideration of action, if any, on matters considered in closed session. (14) ADJOURNMENT 99 H:NEF GENMaTSERING COMMMME D0SAMIMS AGENDA FORMA.GGC Notice to Committee Members: For any questions on the agenda or to place items on the agenda,Committee members should contact the Committee Chair or the Secretary ten days in advance of the Committee Meeting. Committee Chair: Steve Anderson (562)905-9700(La Habra City Hall) Committee Staff Contact: Blake P.Anderson (714)593-7110 General Counsel: Bred Hogin (714)564.2606 Committee Secretary: Gail Garrett (714)593-7101 (714)962-0356 (Fax) E-mail: ggamett@ocsd.com DRAFT MINUTES OF STEERING COMMITTEE MEETING Wednesday, June 22, 2005 A meeting of the Steering Committee of the Orange County Sanitation District was held on Wednesday.June 22,2005 at 5 p.m., in the Districts Administrative Office. (1) The roll was called and a quorum declared present, as follows: STEERING COMMITTEE MEMBERS: OTHERS PRESENT: Directors Present: Bradley R. Hogin, General Counsel Steve Anderson, Chair Don Hughes Jim Ferryman, Vice Chair Roy Moore, Chairman, FAHR Committee STAFF PRESENT: Tod Ridgeway, Chairman, PDC Committee Blake Anderson, General Manager Jim Silva, County Supervisor Bob Ghirelli, Director of Technical Services David Ludwin, Director of Engineering Gary Streed, Director of Finance/Treasurer Directors Absent: Carol Beekman, Director of Communications and Administrative Services Carolyn Cavecche, Chair, OMTS Penny Kyle, Committee Secretary Committee Nick Arhontes, Regional Assets &Services Manager Jim Burror Ingrid Hellebrand (2) APPOINTMENT OF CHAIR PRO TEEM No appointment was necessary. (3) PUBLIC COMMENTS There were no comments by any member of the public. (4) RECEIVE. FILE AND APPROVE MINUTES OF PREVIOUS MEETING The minutes of the May 25, 2005 Steering Committee meeting were approved as drafted. I i Minutes of the Steering Committee Page 2 June 22, 2005 (5) REPORT OF THE COMMITTEE CHAIR Committee Chair Steve Anderson reported that information packets were distributed to Steering Committee Directors for the 2005 CASA Annual Conference at the Mission Bay Hilton in San Diego, August 17 through 20. Directors who plan to attend were directed to contact Gail Garrett as soon as possible. Chair Anderson reported the Legislative Advocacy group continues to confer by phone with staff and OCSD's Sacramento and Washington, DC, consultants. The General Manager would provide additional detail under his report. The standing committees meeting schedule for the month of July was reviewed. Chair Anderson announced that the monthly board meeting would be held on July 20 due to a conflict with the League of Cities conference. He noted the Urban Runoff Ad Hoc Committee will be setting a date dependent upon on what the County is planning to do to brief the cities and special districts about managing urban runoff. Chair Anderson announced, assuming he was elected to serve a second one-year tens that evening, he would be taking a look at the membership of the standing committees and rebalance them. He announced that, as a start, Darryl Miller was appointed to the PDC. (6) REPORT OF THE GENERAL MANAGER General Manager Blake Anderson reported SS 926 (Florez) had been pulled off calendar by Senator Florez because the bill would not survive the Local Government Committee. The City of Los Angeles has considerable opposition to the bill in the way it is currently drafted. The bill would give Kern County's Board of Supervisors the discretionary authority to regulate or ban biosolids. He reported that a meeting held earlier that week between the City of Los Angeles and Senator Florez also included representatives of the press, local TV station, several members of the Kern Board of Supervisors, Kern County Water Agency, and others. After 1%:hours of discussion, it was clear to all that an agreement would not be reached. He feels this Is the beginning of a misinformation campaign. Mr.Anderson provided an update on the Director of Finance recruitment. The final interviews will be taking place in the next few weeks, and it is hopeful that the position would be filled by the end of July. Carol Beekman, Director of Communications&Administrative Services, provided a report on the Groundwater Replenishment Program PIE (Public Information & Education)Committee with regard to a request for proposals (RFP)to acquire a new public information consultant. After reviewing the process of evaluating the RFP's and selecting a vendor, the Orange County Water District (OCWD) directors advised they wanted to be involved in the interviews, ratings, and final selection. They also wanted to be able to select a different candidate if they didn't agree with staffs recommendation. Ms. Beekman stated that OCSD added a clause a few years prior to its delegation of authority resolution that would not allow board members to participate in the RFP selection. The option to change the clause in the resolution could be amended only by action of the Board of Directors. After lengthy discussion among the Steering Committee members, it was clarified that a majority of OCSD and OCWD board members of the GWRS committee would have to approve the contract, as well as Minutes of the Steering Committee Page 3 June 22, 2005 both general managers. Staff was directed to not interfere with the established process. Gary Streed, Director of Finance, provided a brief report on the articles that appeared in the Register and the Los Angeles Times regarding the projected funding shortfall of the OCERS retirement fund. OCERS has recently changed actuaries which use different assumptions. The retirement board has hired a third party to review the plan and the actuarial assumptions and will not be taking any action until they receive the final report. Blake Anderson then discussed Measure M,which would probably appear on the 2006 ballot. OCTA is working to get the measure passed during 2006. One of the questions that has emerged is whether clean water should be part of the funding. He advised this issue is a policy matter the Directors need to consider. The Committee requested Art Leahy and Monty Ward of OCTA give a presentation on the need for the extension to the Board of Directors, and requested additional education on the issue to the Directors and the public. Mr. Anderson addressed the issue of discomfort expressed by some of the Directors recently regarding the Capital Improvement Program (CIP). Their concerns were primarily how the board knows whether the CIP project list and associated costs Is too much and could any of the projects be delayed. He reviewed the process of how the projects are scrutinized by staff before coming before the Board of Directors for approval. Following discussion, the Steering Committee requested staff provide a more detailed and in-depth presentation of the CIP at a board meeting in the Fall. Jim Burror, Engineering Supervisor, reported OCSD has received a letter from the City of Fountain Valley requesting road impact fees In connection to two projects that will be taking place in Fountain Valley regarding secondary treatment facilities and the Ellis Avenue Pump Station. He noted that the Callfomla vehicle code, Section 9400.8, prohibits the collection of roadway Impact fees for legal loads even if legal loads cause damage. The EIRs on these two projects does state that if roads are damaged because of the projects, OCSD will make the repairs as part of the mitigation measures. (7) REPORT OF GENERAL COUNSEL General Counsel Brad Hogin reported that AB 528, which would have extended private enforcement of most of the major environmental laws in California, did not have enough votes to move the bill off the assembly floor. Two bills that were part of the governor's reform package relating to public agency retirement packages also died in committee. These bills would have established certain defined contribution plans and place a constitutional amendment on the ballot that would prohibit new employees after a certain date from enrolling into a defined benefit plan. (8) DISCUSSION ITEMS (Items A-D) A. Consider GWRS Proposal by National Water Research Institute (NWRI)and Discovery Science Center. Bob Ghirelli and Carol Beekman reviewed the proposals submitted by both organizations requesting funding for a visitor's center for NWRI at an estimated cost of$300,000 for three years and/or a water exhibit for the Discovery Science Center for a $100,000 donation. The Steering Committee directed staff to proceed with the Discovery Science Center project. B. Report on Mountain Park Development. This Item was pulled for discussion for the following month. Minutes of the Steering Committee Page 4 June 22, 2005 C. The Agenda Items scheduled to be reviewed by the Board's working committees in July were reviewed. D. The agenda items scheduled to be presented to the Board at tonight's meeting were reviewed. (9) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY Legal Services Ad Hoc Committee Update—Vice Chair Jim Ferryman reported the Ad Hoc Committee was prepared to send out requests for qualifications for legal services. It was noted that bids have not been requested for more than 25 years. Director Ferryman also stated Directors were very satisfied with the services provided by the current legal counsel, Woodruff, Spradlin & Smart. The Ad Hoc Committee would review and evaluate the RFQ's that would be submitted by August 1, and then request RFP's for consideration. (10) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING There were none. (11) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND/OR STAFF REPORT There were none. (12) CONSIDERATION OF UPCOMING MEETINGS The next Steering Committee meeting is scheduled for Wednesday, July 20, 2005 at 5 p.m. The next Board Meeting is scheduled for Wednesday, July 20, 2005 at 7 p.m. (13) CLOSED SESSION The Committee convened at 6:41 p.m. in Closed Session, pursuant to Sections 54957, 54956.8 and 54956.9(b)to discuss Items 13(A)(1), (3), (4) and (5). Minutes of the Closed Session are on file with the Board Secretary. Confidential Minutes of the Closed Session held by the Steering Committee have been prepared in accordance with Government Code Section 54957.2, and are maintained by the Board Secretary in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. A report of the recommended actions will be publicly reported at the time the approved actions become final. The Steering Committee did not discuss Item 13(A)(2). At 7:00 p.m., the Committee reconvened in regular session. (14) ADJOURNMENT The Chair declared the meeting adjourned at 7:00 p.m. Minutes of the Steering Committee Page 5 June 22, 2005 Submitted by: Penny Kyle Steering Committee acretary (Acting) xwgmpenee�vwMq camnww,�sc wmem wm.seat STEERING COMMITTEE FWebngnate T•Bi.ofoir. 07120105 AGENDA REPORT 1R "UMWItem Number Orange County-Sanitation DistrictBr � FROM: David Ludwin, Director of Engineering Originator: Jim Burror, Engineering Supervisor SUBJECT: MOUNTAIN PARK DEVELOPMENT GENERAL MANAGER'S RECOMMENDATION Information Item Only SUMMARY • Severq Directors have inquired about the status of the Mountain Park Development and it interrelationships with the on-going Santa Ana River Interceptor(SARI) Project and Santa Ana River Watershed Protection Authority's (SAWPA) pursuit of a brine-only sewer to the ocean. • The Mountain Park Project site lies within undeveloped and developed portions of the City of Anaheim (Anaheim), and unincorporated Orange County. The project area is broken up into east and west portions by the Eastern Transportation Corridor (Route 241). The project is also adjacently south of the Riverside Freeway (Route 91). The project area encompasses 3,000 acres. The planned number of new residential dwelling units is 2,500. • The Irvine Company has been trying to develop this property for over 16 years. Correspondence between Orange County Sanitation District (OCSD), the Irvine Company, and its engineering consultants, date back to 1989. • The least expensive connection location for this project's sewage flows would be on OCSD's Santa Ana River Interceptor(SARI) at Gypsum Canyon Road. This is the preferred connection of the Irvine Company and is upstream of the SARI Control Gate Structure at Savi Ranch Parkway. • OCSD prefers that all Project flows connect to the SARI downstream of the Control Gate Structure. This option is preferred for the following reasons: • SARI's future alignment has not been decided. Connection locations downstream of the Control Gate at SAVI Ranch are more certain. • Connections upstream of the Control Gate would involve the construction of new sewers in environmentally sensitive locations. Although this new sewer would be owned by the City of Anaheim, OCSD's experience is that maintenance access to sewers in environmentally sensitive areas can become limited over time, even with legal easement rights. X berlapeWaWemna CamallaeSC05`D)W)Hp5"n.Van aM im, S.,M 11 m em �= Page 1 The Santa Ana Watershed Project Authority(SAWPA) has been studying the option of taking ownership of the SARI upstream of OCSD's control gate. Under this option, SAWPA would redirect OCSD service area sewage flows out of SARI in the areas upstream of the gate structure and construct a new sewer to the ocean from the control gate at Savi Ranch. This option would call for the redirection and connection of Mountain Park sanitary sewage flows, if a connection was made upstream of the control gate. However, at this time the SAWPA brine only seems unlikely to develop. If a connection above the gate control structure is allowed, OCSD will be requesting as part of the connection permit the following: • The City of Anaheim will be the owner of the newly constructed sewer. • The Irvine Company will be required to coordinate with the SARI relocation project to allow for the grade stabilizer project option. • The City of Anaheim and the Irvine Company may be required to relocate the sewer. If a decision on the SARI relocation project is made within five years and the relocation impacts sewerage service to the new development, it will be replaced by the City of Anaheim or the Irvine Company. • It will be assumed that after five years, any project by SAWPA to relocate the SARI line will need to include the relocation of the new development's sewer too. This is because it will be assumed to be existing infrastructure being impacted by the larger relocation project. PRIOR COMMITTEE/BOARD ACTIONS None PROJECT/CONTRACT COST SUMMARY Not Applicable BUDGETIMPACT ❑ This item has been budgeted. (Line item: ) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ® Not applicable (information item) ADDITIONAL INFORMATION The SARI Protection/Relocation Project will protect or relocate the existing sewer that runs underneath the Santa Ana River. The SARI was constructed in the mid-1970's to serve the Inland Empire area, primarily as a means to export salty water out of the upper watershed. N:W.p1�.0.^d.�l.tliy U—I, QWIWM72W5 Wi.nW,i P.M1-1 SARI S,BBNq ARU.R( Id C RRn:.d. WwmW Page 2 Accelerated erosion over sections of sewer under the river has caused SAWPA and OCSD to initiate relocations and/or protection of the sewer. This project was started in 1999 and continues. During recent heavy rains, emergency repairs have been required to protect the sewer in-place and allow enough time to design and construct new sewer(s). Several issues ranging from disagreements over costs, changing of project oversight responsibilities, and emerging alternative project ideas, have also hampered this project. ALTERNATIVES The Irvine Company has presented several alternatives in a sewer study that has been given to OCSD. These alternatives vary greatly in construction costs and include: • A direct gravity connection to SARI near Gypsum Canyon Road • Gravity sewer west down Santa Ana Canyon Road and connect downstream of the SARI Control Gate Structure Within these options, routes may vary and will also depend on the final alignment of the SARI line. CEQA FINDINGS The City of Anaheim released a Draft Environmental Impact Report for the Mountain Park Specific Plan Amendment in March 2005. ATTACHMENTS None JB:sa HmtBlobaMgetba Dmft RepoftVSteenng CommitleeWountain PaA and SARI Steering AR 062 05 doc Ntlapfay neWminp co,.,mrenwse�•]zws ManL PaM m'9511151eenrpM pan&al d. �W Page 3 STEERING COMMITTEE Meegng Date To ad.of Dir. 72010s AGENDA REPORT item Numbs Item Number ON Orange County Sanitation District FROM: Blake P. Anderson, General Manager Originator: Gail Garrett, Committee Secretary SUBJECT: August Agenda Items for Consideration by Working Committees GENERAL MANAGER'S RECOMMENDATION Review with staff the agenda items tentatively scheduled for review by the Working Committees in August . SUMMARY Staff routinely prepares for the Steering Committee a list of items scheduled for presentation to the Working Committees and the Board at their next monthly meetings. This allows the Steering Committee the opportunity to review these items early enough to make reassignments in the review or approval process. The following items are scheduled to be considered by the Committees in August: PDC Committee: 1. Ratify Change Order No. 6 for Job No. P247-3, Secondary Treatment Facilities Process Upgrades at Plant No. 2 2. Ratify Change Order No. 1 and Approve Closeout Agreement for Job No. J-67, Peak Flow Management 3. Ratify Change Order No. 13 for Job. No. J-35-1, Area Classification Study Implementation 4. Approve Amendment No. 8 to PSA for Job No. 1-2-4, Bushard Trunk Sewer Rehabilitation 5. Approve Amendment No. 3 to PSA for Job No. 1-10, Rehabilitation of Ellis Avenue Pump Station 6. Approve Amendment No. 5 to PSA for Job No. J-84, Space Allocation and Interior Renovation 7. Approve a Budget Increase for Job No. SP-81, Electrical Equipment Refurbishment and Protection 8. Approve Sole Source Agreement for Contract No. 2-41, Santa Ana River Interceptor Realignment and Protection 9. Approve Time Extensions for Job No. J-73, Cooperative Projects Grant Program 10. Report on Contract No. 1-96, Continuous Feed Chemical Treatment Facility The OMTS and FAHR Committees will be dark in August PROJECT/CONTRACT COST SUMMARY N/A BUDGETIMPACT ❑ This item has been budgeted. (Line item: ) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ® Not applicable (information item) ADDITIONAL INFORMATION NA ALTERNATIVES NA CECIA FINDINGS Not a project. ATTACHMENTS NA 99 Xbepsogo^daZtse ryLprtmKess 00MM72005 Us[of Aft IV MWSIa 6 W R—. WOW Page 2 STEERING COMMITTEE Meeting Dab To Bid.of Dir. /zo/g5 AGENDA REPORT Item Number Ibnn Number emt Orange County S nitatlon District FROM: Blake P. Anderson, General Manager Originator: Gail Garrett, Committee Secretary SUBJECT: Agenda Items for Consideration by the Board GENERAL MANAGER'S RECOMMENDATION Review with staff the agenda items tentatively scheduled for consideration by the Board at its July 20, 2005 meeting. SUMMARY Staff routinely prepares for the Steering Committee lists of items scheduled for presentation to the Working Committees and the Board at their next monthly meetings. This allows the Steering Committee the opportunity to review these items early enough to make reassignments in the review or approval process. The following items are scheduled to be considered by the Board at the July 20, 2005 meeting: CONSENTCALENDAR 9. Consideration of motion to approve all agenda items appearing on the Consent Calendar not specifically removed from same, as follows: a. Adopt Resolution No. OCSD 05-20, directing the County Tax Collector- Treasurer to include sanitary sewer service charges on the 2005-06 property tax bill. END OF CONSENT CALENDAR 10. Consideration of items deleted from Consent Calendar, if any. COMMITTEE REPORTS AND RECOMMENDED ACTIONS 11. STEERING COMMITTEE Consent Calendar a. Order draft Steering Committee Minutes for the meeting held on June 22, 2005, to be filed. Non-Consent Calendar b. Review and consideration of agenda items considered by the Steering Committee re the July 20, 2005 meeting. C. Consideration of items deleted from Steering Committee Consent Calendar, if any. 12. OPERATIONS. MAINTENANCE AND TECHNICAL SERVICES COMMITTEE (OMTS) OMTS Consent Calendar a. Order draft Operations, Maintenance and Technical Services Committee Minutes for the meeting held on July 6, 2005, to be filed. b. Authorize negotiations and award a consulting services agreement to CH2M Hill to conduct a needs assessment and prepare recommendations for development of an Environmental Compliance Awareness Program (ECAP), Specification No. CS-2005-229 BD, in an amount not to exceed $149,000, for the period of August 1, 2005 through December 31, 2006. C. Authorize the General Manager to enter into a contract with EnerTech Environmental, Inc., in a form approved by General Counsel, to manage biosolids at their facility in Rialto, California for a 10-year period, and to provide four five-year options at an initial cost of$69.40 per ton of biosolids managed for an amount not to exceed $5,500,000 per year plus annual contract index escalators. d. Approve Change Order No. 2 to P.O. No. 43649 issued to Atkins Water as a sole source contract in the amount of$106,560, for a total amount not to exceed $140,200, for evaluation and preliminary design activities re Anaerobic Baffled Reactor(ABR) technology. e. (1) Receive and file Asset Management Plan 2005 Executive Summary prepared by GHD, LLC and Staff; (2) Receive and file OCSD Asset Management Improvement Program Overall Roadmap 2005, prepared by GHD, LLC, dated June 2005; and, (3)Approve Amendment No. 2 to the Consulting Services Agreement with GHD, LLC for Asset Management, Job No. SP-68-02, to continue services for a thirteen-month period from July 1, 2005 to July 31, 2006 for an additional cost of$550,000, increasing the total amount not to exceed $918,000. N beplbpspa151eenrq CmmtleeV WSpTp)XgS liil M qRa In JUIY BOd14 W.�M[ Page 2 OMTS Non-Consent Calendar f. Consideration of items deleted from OMTS Committee Consent Calendar, if any 13. PLANNING, DESIGN AND CONSTRUCTION COMMITTEE (PDC) PDC Consent Calendar a. Order draft Planning, Design and Construction Committee Minutes for the meeting held on July 7, 2005 to be filed. b. Ratify Change Order No. 7 to Effluent Pump Station Annex, Job No. J-77, with J.F. Shea Construction, Inc., authorizing an addition of$53,196, increasing the total contract amount to $44,007,554. C. Ratify Change Order No. 5 to Trickling Filter Rehabilitation and New Clarifiers, Job No. P1-76, with J.R. Filanc Construction Company, Inc., authorizing an addition of$787,043 increasing the total contract amount to $34,219,858, d. Ratify Change Order No. 4 to Gisler-Redhill Trunk Improvements, Reach "A", Contract No. 7-36; Orange Trunk Improvements, Contract No. 7-39; Gisler-Redhill/North Trunk Improvements, Contract No. 7-41; and City of Tustin Project Nos. 6106 and 6151, with ARB, Inc., authorizing an addition of $493,263 and nine calendar days, increasing the total contract amount to $19,960,072. e. Ratify Change Order No. 21 to Primary Clarifiers 16-31 and Related Facilities, Job No. P1-37, with Margate Construction, authorizing an addition of$100,648 increasing the total contract amount to $71,708,740. f. Approve Change Order No. 8 to Effluent Pump Station Annex, Job No. J- 77, with J.F. Shea Construction, Inc., authorizing an addition of$220,133, increasing the total contract amount to $44,227,687. g. (1) Approve a budget increase of$1,800,000 for a total budget of $2,800,000; and, (2) Authorize the General Manager to solicit bids and award a construction contract for the construction of the Santa Ana River Interceptor 2005 — Phase 2 Emergency Repairs for an amount not to exceed $1,500,000. h. (1) Approve Amendment No. 7 to the Professional Services Agreement with Carollo Engineers for Headworks Replacement at Plant No. 2, Job No. P2-66, providing for additional engineering services during construction for an additional amount of $10,457,710. increasing the total amount not to exceed $26,740,004; n.unae�meen"yw'nre�oosonarzoos�:,maw iazirewma:�aoo Page 3 (2)Authorize a budget transfer of $1,088,060 from Job No. P2-66 to Headworks Construction Trailers at Plant No. 2, Job No. P2-66-2; and, (3)Authorize a budget transfer of$3,797,298 from Job No. P2-66 to Utility Corridor, Parking and Pump Station for Contractor Staging Areas, Job No. P2-66-3. PDC Non-Consent Calendar i. Consideration of items deleted from PDC Committee Consent Calendar, if any 14. FINANCE ADMINISTRATION AND HUMAN RESOURCES COMMITTEE (FAHR) FAHR Consent Calendar a. Order draft Finance, Administration and Human Resources Committee Minutes for the meeting held on July 13, 2005 to be filed. (Minutes to be distributed at 07120105 Board Meeting) b. Receive and file Treasurer's Report for the month of June 2005. C. Adopt Resolution No. OCSD 05-21, Authorizing the District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's Investment Policy Statement and Performance Benchmarks for FY 2004-05; and Repealing Resolution No. OCSD 04-21. d. (1) Direct staff to issue up to $200 million in new variable-rate Certificates of Participation (COP) debt; and, (2) Authorize the General Manager to negotiate and enter into a sole source Consultant Services Agreement with Orrick, Herrington & Sutcliffe to provide bond counsel services in an amount not to exceed $135,000. e. Receive and file the Public Affairs Strategic Plan FY 2005-06. f. Authorize the Director of Human Resources to make changes to existing vacant Orange County Sanitation District classification titles and to downgrade associated pay grades in support of the staffing plan. FAHR Non-Consent Calendar g. Consideration of items deleted from FAHR Committee Consent Calendar, if any. x:�on mvsiena comnmuaosnTorzoas��m I d. nzwea:wow Page 4 15. GWR SYSTEM STEERING COMMITTEE (GWRSSC) GWRSSC Consent Calendar a. Order Joint Groundwater Replenishment System Steering Committee Minutes for the meeting held on June 13, 2005 to be filed. b. Approve Amendment No. 6 to the Professional Services Agreement with MWH Americas, Inc., providing for the annual cost-of-living adjustment in accordance with their Professional Services Agreement, for the Groundwater Replenishment System, Job No. J-36, for an additional amount of$212,205, increasing the total amount not to exceed $13,785,451 to be equally shared with the Orange County Water District. GWRSSC Non-Consent Calendar C. Consideration of items deleted from GWRSSC Consent Calendar, if any. NON-CONSENT CALENDAR 16. (1) Approve Plans and Specifications and Addendum No. 1 for Laboratory Rehabilitation at Plant No. 1, Job No. J-88, on file at the office of the Board Secretary; (2) Receive and file bid tabulation; and, (3)Award a construction contract to Dalke and Sons Construction, Inc., for an amount not to exceed $643,280. 17. (1)Approve Plans and Specifications for Plant No.1 Water Distribution System Modifications, Job No. FE05-20 on file at the office of the Board Secretary; (2) Receive and file bid tabulation; and (3)Award a construction contract to Mike Prlich & Sons, Inc. for Plant No. 1 Water Distribution System Modifications, Job No. FE05-20, for an amount not to exceed $196,378. 18. (1)Approve Plans and Specifications and Addenda Nos. 1, 2, and 3 for Utility Corridor, Parking, and Pump Station for Contractor Staging, Job No. P2-66-3, on file at the office of the Board Secretary; (2) Receive and file bid tabulation; and, H1AM WWlS N GmmY0m1IU0WM72W9 un a alb Im JVY Bw,O IArc �:„ 8 Page (3)Award a construction contract to Denboer Engineering & Construction, Inc. for Utility Corridor, Parking, and Pump Station for Contractor Staging, Job No. P2- 66-3, for an amount not to exceed $1,323,000. 19. Closed Session PROJECT/CONTRACT COST SUMMARY N/A BUDGETIMPACT ❑ This item has been budgeted. (Line item: ) ❑ This item has been budgeted, but there are insufficient funds. ❑ This Rem has not been budgeted. ® Not applicable (information Rem) ADDITIONAL INFORMATION NA ALTERNATIVES NA CEQA FINDINGS Not a project. ATTACHMENTS NA 99 H`peraB��M rmmtlx110 W`OM)zaos uz a ud iu My eoaroa.�eoc arose Page 6 ORANGE COUNTY SANITATION DISTRICT (714) 962-2411 www.ocsd.com Mailing Address: P.O. Box 8127 Fountain Valley, California 92728-8127 Street Address: 10844 Ellis Avenue Fountain Valley, California 92708-7018 nynoacn\MV+Wwlawu�m®rs\m arz a�u\wwm-aaa owar raon po-eo-w n:wwup it e..h ar r m m A X O O 0 O m C C i,,. 4J tT, P ith � m m e� a a �. Y � •i' � .X+ lx 1 � � , >,\t., e � tN' y o t i d' Q / a '�1 � 41! i I \ 4 rS r;=+r avLLli� d• yr'Y� ''� rd yf+b`�t � F o v � t Q r f , l.� .�, °}i. \\ .;,t,� C iat(n�[�r ,, P �t ti > � •�- LI AM 11 1}G,4 y � 2 � � '!' °\ �11�3Y'�1 C'�r In� .` � •i t � �t �� _ jh fly.`�, r; ... h + t A' s`j( � 'F,t f � >, �.. e itA1'llir .. ?` I' �ti`�+1 \ t ,h +„��,.•'. l ' �l/�+.�� r �,�� ' / 4 r '��t �u art y�• ' '� y� c i . Ct yyy, ^� �R Y gam::= µay: +.... SEGMENT LENGTH(it) COMMENT. 1 1000' GRAVITY MAIN(MICROTUNNEL) �a•` 2 1800' GRAVITY MAIN � N ' Figure 7.7 . EAST BASIN OFF-SITE scam rmm0' tl pp41 j' SEWER ALTERNATIVE 1 #iidYOate.'9rL6Ak IRVINE COMMUNFY DEVELOPMENT COMPAW Gravity Main to SARI Pipeline — - via Gypsum Canyon Road r SU lNnwovol3NdQUU33 T.T i � i �T�� j i v ORANGE COUNTY SANITATION DISTRICT J Consulting—Information Technology Management July 2005 W sr J J J W 141 COVE STREET.SUITE 6B0 cl ��JJ�� {/�� NEVIPORT BEACH,CALIFORNIA 92660 _ Moreland (7 e.�[0001iGGN�GO� (949)221-0025 Moreland PUSUC ACCOUNTANTS 570 RANCHEROS DRIVE.SUITE 260 SAN MARCOS.CA 92069 (7W)752-3390 July 11, 2005 r Mr. Brad Hogin General Counsel Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Dear Mr. Hogin: During the past eighteen months the Orange County Sanitation District (District) received invoices totaling nearly $352,000 from Partners Consulting Services, Inc. (Partners) that were in excess of amounts authorized by the District. All of the services were authorized by Senior Project Manager in the Information System Department, Robert Thiede. Accordingly, you asked us to perform the following and provide our results in a letter report: Review the District's policies that should prevent an employee from authorizing services in excess of authorized amounts, or detect when excess amounts have been authorized by an employee. • Determine if current policies and procedures are adequate and failed or if current policies and procedures need improvement. BACKGROUND Partners was awarded a contract in March 2003 to provide JD Edwards Help Desk Support to the District. The amount of the contract was not to exceed $180,000 for the period April 1, 2003, through March 31, 2004, with an option to extend for four one-year periods. The bid and award process followed District policy and procedure as outlined by the Delegation of Authority (DOA) in place at the time. Senior Project Manager, Mr. Thiede, was responsible for managing the project. Mr. Thiede had previous experience in the District Purchasing Department as a Contract Administrator. L' Mr.Brad Hogin General Counsel L Orange County Sanitation District July 11,2005 Page 2 L During the second contract year, April 1, 2004, through March 31, 2005, Partners was authorized by Mr. Thiede to provide additional services above and beyond the amount of the original contract in the amount of$26,500. The scope of work performed was within the original contract statement of work; however Mr. Thiede did not seek proper authorization L prior to requesting the services performed. Beginning December 8, 2003, through April 10, 2005, Partners was authorized by Mr. L Thiede to perform additional services outside the scope of the original contract. These services consisted primarily of ancillary system development in many functional areas L including Human Resources and Health & Safety, Payroll and Engineering. The total of these services was$605,600. Of this amount, invoices totaling $296,800 remain unpaid. Mr. Thiede did not obtain proper authorization for most of these invoices. r The scope of our work included interviews and discussions with various members of the Finance, Purchasing, and Information Technology departments, as well as key personnel at Partners. We also reviewed various documents related to the procurement of these services, management of this project, and receipt and payment of invoices related to these services. Additionally, we requested District staff to review and validate that these services had L actually been provided. Based on our limited review,we have concluded that several factors contributed to the ability of Mr. Thiede to exceed the limits of his authority. Each factor is discussed in the attached pages along with our recommendations on how to avoid future occurrences of this nature. Additionally, we have provided a list of other areas in which we believe additional study is warranted. We are pleased to assist the District with this important project. We are available to discuss y our report in more detail at your convenience. Very truly yours, MORELAND&ASSOCIATES,INC. L Michael C. Moreland, Partner MCM/kk L L r r Findings and Recommendations r IT Management ofthe aroiect indin In April, 2005, Mr. Thiede stated in a document intended to capture the details of the issue that he was unable to clearly define the amounts that had been paid to Partners, or how much was due. He was also unable to find the time to review and correct the issue. He further indicated that he had not notified his supervisors because he felt he would eventually get r things under control. r Mr. Thiede stated to us that he had not been tracking the hours that consultants were working on projects and that he was aware that the situation was quickly getting worse. He also mentioned in his document and to us that several of the projects assigned without proper r authorization were "emergency" work and critical in nature and that the pressure from various users was overwhelming. However, based on our review of the DOA and discussions with the Purchasing Manager, such work did not meet the definition of "emergency" according to District policy. In both situations (JDE Help Desk and ancillary design work)there was no formal follow up process between the Project Manager and the consultants and no tracking mechanism in place to gauge the progress of the multitude of projects underway. At the height of this project there were seven consultants at the site location working on various projects. With regard to outstanding invoices, the actual cost of services averaged 75% over the vendor's original estimate. r Recommendation r Implement a project management system that tracks the number of hours worked versus estimated hours by sub-project. Also, establish procedures to ensure compliance with the District's"emergency"purchasing policy. r Finding 2 Until recently, Partners was not noting a Purchase Order (PO) number on the invoice and often had several work efforts, sometimes accounting for more than one PO, on one invoice. In addition,many PO's were generated covering more than one separate work effort. r Recommendation r Require vendors to submit separate invoices for different work efforts. Also enforce the District invoice terms and conditions that state the vendor must include the PO number on all invoices. 3 Finding 3 Management of the IT Department was not aware of this mounting issue and did not become involved until April,2005. .+ Over the time frame that these projects took place, regular IT Department "all staff' group meetings were held to discuss what projects were underway in the department and the status `+ of those projects. In addition, each member has a quarterly objective report that is provided to their manager updating the status of each project currently within their scope of I responsibility. Mr. Thiede stated to us that he does not meet with his manager on any consistent basis to discuss issues or concerns. Mr. Thiede stated both in his document and to us, that he did not have available time to sort through the mounting issue and felt he had to i resolve it on his own. He was not comfortable asking for guidance or assistance from his manager. i Recommendation W Increase and enhance regular communication between the Project Manager on large projects and upper management. For the magnitude and duration of this project, weekly or bi-weekly one-on-one meetings may have been helpful. i Accounts Payable Department .. V Finding 4 The current Financial Information System(FIS)does not provide an invoice logging function that permits tracking of invoices received into the organization and routed out for approval and/or coding unless there are funds available for the payment of the invoice. To provide L this level of detail and tracking, the Accounts Payable procedure requires manual creation of an Excel spreadsheet (Supplemental Invoice Log) of all invoices of this nature. This spreadsheet is to be emailed on a weekly basis to all levels of management for review. We have reviewed all supplemental invoice logs that were generated from October 1, 2004 through current, and Partners invoices do not appear until April 22,2005. The oldest invoice s+ on the list on that day is dated October 29, 2004 and should have appeared on the log beginning the end of January, 2005. Based on our review, this log is not being consistently or accurately maintained. Recommendations W Implement a formal invoice logging system that interfaces with the PO and generates encumbered budget to actual reports. Ensure that these reports are accessible to Project Managers and management staff on an as-needed basis. it 4 L r ,r Until a new system is in place the current process should be formally documented. The supplemental invoice log should be submitted to the Accounting Manager on a weekly basis for his distribution to District upper management. This will ensure a higher level of r responsibility for its consistency, accuracy and timeliness. Finding 5 r Section 2.3 of the District Purchase Order terms and conditions states that the vendor shall submit invoices to the Accounts Payable Department and each invoice must reference the appropriate District PO number. All outstanding invoices from December 27, 2004, are addressed to the attention of Mr. Thiede. It is not clear if these invoices went directly to the Accounting Department or directly to Mr.Thiede. r Recommendation r Establish and enforce a procedure routing all vendor invoices (regardless of how they are addressed) directly to the Accounting Department and log or scan them into this system for r tracking. Finding 6 r Outstanding invoices from Partners dated prior to December 27, 2004, do not have a PO number printed on them. The Accounting Department procedure is to make an attempt to ® match the invoice to a PO in the system when possible and then route it to the appropriate person for PO validation, coding and review. if Accounting is unable to make a match, the invoice goes directly to the appropriate person for a PO number. There is currently no enforcement of the PO terms and conditions requiring the vendor to include a PO number on the invoice.-Mismatching can easily occur by the Accounting Department r Recommendations r Return all invoices without a PO reference to the vendor without processing. The enforcement of the PO terms and conditions will transfer some level of responsibility to the vendor. A minimal recommendation would be to immediately implement a procedure prohibiting the Accounting Department from attempting to match a PO number to the invoice description. This will avoid mismatching at this level and will require the person approving the invoice be responsible for the original PO coding. r Finding 7 Based on discussions with various departments District staff, few are clear as to who is responsible, what the exact process is, how difficult the process is, or if corrections can even be made once an invoice is paid with an incorrect PO number. 5 Recommendation Develop and distribute a clear procedure regarding changes to correct PO's that have had incorrect charges applied to them. Purchasing Department L Finding 8 The March 26, 2003, Board Meeting minutes state that the Board approved authorization for v the General Manager to award Partners with the JD Edwards contract in an amount not-to- exceed$180,000. An email, dated March 20, 2003, confirms a conversation from Mr. Thiede L to Ms. Christine Maher in Purchasing agreeing not to include a not-to-exceed clause in the Partners contract. Recommendations Implement a procedure in Purchasing that requires not-to-exceed wording on all contracts v awarded by the Board as such. This process will ensure that the vendor is also aware that this is the type of contract that has been awarded. To imply Anther that the vendor has shared responsibility, an additional clause stating that services performed above and beyond the not-to-exceed amount may not be paid would also be helpful. Finding 9 v There are currently no reports available or processes in place for tracking when PO's are generated versus when the services were performed, the number of PO's generated greater than $5,000 for one vendor (sole sourcing), or for analyzing if PO and/or invoice splitting is occurring. The present system relies on the Purchasing staff to recall the frequency of recent requests generated and the situations surrounding them. Upon review of the ancillary services performed by Partners, most likely these services should have gone through the formal bid process. Recommendation L Develop additional Purchasing reports. There should be a report generated on a regular basis listing all PO's under $5,000 created for a particular vendor to ensure sole sourcing procedures are being followed. A report should be developed detailing total PO's generated for a particular period to evaluate and determine if invoice and/or PO splitting may be occurring. A system should in place to flag or track the number of PO's generated as an "emergency"or after the fact basis to alert management that this situation is occurring. I W 6 r „r Partners Consulting Services, Inc. Mr. Chuck Haggis, Senior Director for Partners, has stated to us that they have had payment r issues with the District since late summer 2004. They worked diligently with Mr. Thiede and all invoices were paid current by their fiscal year end, October 31, 2004. However, the situation continued after the beginning of 2005 and still remains unresolved. Per an email r from Mr. Haggis to Partners Accounting staff on January 31, 2005, W. Thiede had instructed that Partners split invoices over $25,000 into multiple invoices as the approval process for invoices over $25,000 require a Director level of authority. W. Haggis requested that all invoices be retroactively adjusted. Per our review, all paid and unpaid invoices dated after January 1, 2005, were for amounts less than $25,000. Mr. Haggis also stated that per r Mr. Thiede's request, he had begun sending backup with the invoices indicating the statement of work and/or PO number related to the charges to help expedite the process. r The Vice President of Partners (Mr. Jerry Olson) and W. Haggis both stated to us that the policy at Partners is to work directly with the client contact (in this case, W. Thiede)until all methods of remedy have been exhausted with regard to outstanding invoices. Mr. Haggis did state that he was growing weary of the situation and was considering bringing the issue to the next level of management,probably within the next 30 days if the situation did not improve. Finding 10 Partners does not issue invoice statements or status reports unless requested by the client. No one at Partners that we interviewed recalls being offered any sort of payment plan nor did they request one. They continued to get reassurance from W. Thiede that the funds were r there and the issue would be resolved soon. Recommendation r The District should request regular statements and status reports from vendors awarded large projects. r Additional Areas for Review Department culture—The level of management support may not be fostering an environment that promotes open discussions and requests for assistance. Staff appears to avoid informing management of issues until they become very significant. Project leadership skill development—Different projects may require different skill sets. For example, projects with clear set direction and boundaries will be much easier to manage than ones without. Formal training, mentoring and "shadowing" should be explored as they may assist in the development of the various skill levels. Review of work performed—Confirmation of work performed for non-tangible, professional services can sometimes be challenging. A higher level of management review on a random basis should take place to ensure that those services are actually being performed to satisfaction. r 7 i W Accounts Payable role — Some additional internal control can be obtained by charging r responsibility for PO matching and proper invoice format to the requestor of the services. Accounts Payables should be less involved in this decision making process. Performance rating program — Development of a step six level in a performance review system may foster an environment where individuals at that level will refrain from reaching out for assistance when overwhelmed, or admitting to inadequacies in their performance due to monetary considerations. Mr. Thiede is at a step six level. Change in scope of work by a vendor—The scope of work in this case changed from simply a help desk status to some fairly large design projects. Systems should be in place to ensure that all levels of management of the project and/or the Purchasing Department are made aware that the change of scope has occurred and that new work may require a formal bid process. �. Statement of Work — Management review at a higher level should be considered for development of the statement of work for larger volume,more complex projects. W L 60 V L 6. W W